Managerial Ownership and Financial Analysts’ Information Environment
54 Pages Posted: 20 May 2013 Last revised: 19 Oct 2013
Date Written: October 19, 2013
Despite the importance of sell-side financial analysts as information intermediaries in the capital market, little is known about how managerial equity ownership associates with their information environment. Using Barron, Kim, Lim and Stevens’ (1998) framework of measuring information precision, we observe that managerial ownership is positively associated with financial analysts’ public and private information precisions, largely consistent with the alignment view of managerial equity ownership. These results are robust to controlling for various economic and statistical factors that might affect the inference.
Keywords: Managerial Ownership, Information Environment, Incentive Alignment, Information Precision
JEL Classification: M40, M41, O16
Suggested Citation: Suggested Citation